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Stocker/Feedlot Example

Stocker/Feedlot Example. Dr. Randy Harp. Land Cost. $60 per acre (custom farming) $20 per acre (lease) Total = $80 per acre. Purchasing of Calves. 360 # @ $1.05 = $378/calf Processing costs/head = $20 Wormer Implant Hay/feed Ear tags Antibiotics Etc. Purchasing of Calves cont.

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Stocker/Feedlot Example

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  1. Stocker/Feedlot Example Dr. Randy Harp

  2. Land Cost • $60 per acre (custom farming) • $20 per acre (lease) • Total = $80 per acre

  3. Purchasing of Calves • 360 # @ $1.05 = $378/calf • Processing costs/head = $20 • Wormer • Implant • Hay/feed • Ear tags • Antibiotics • Etc.

  4. Purchasing of Calves cont. • Death loss = $7.50 (2 % of 378#) • Interest = $19 (10%of 380 X ½ year) • Total cost per head = $504.50 • Includes purchase and processing cost • Total cost – cost of the calf = • $504.5 - $378 = cost of production = $126.5

  5. Cost of Gain • Cost of production /Total pounds of gain • Pounds of gain = 150 days on pasture X 2.0 lbs of gain per day = 300 pounds • $126.5/300 = $0.422 • 42.2 cents per lb = cost of gain

  6. Break Even • Total cost/sale weight = Break Even • Beginning weight + total gain = projected ending weight or pay weight • 360+300= 660 • 660 x .98 (2% shrink) = 647 (sale weight) • 504.50/647 = $77.98 cwt or $0.78 per lb

  7. Profit per head • 647 (sale weight) x $0.90 = $582.30 (projected pay price) • $582.30 - $504.50 = $77.80 per head • If I had 500 head (death loss of 2%) = 490 • $77.80 x 490 = $38,122 profit • What did we leave out???????

  8. Feedlot Example • Purchase 700# calves @ $0.90 per lb • 700 x 3% shrink = 679 x $0.90 = $611.10 • Processing and feedlot expenses = $350 medical, receiving, transportation, death loss interest, feed, yardage, etc. • Purchase + costs = $630 + $350 = $980

  9. Feedlot Example cont. • Break Even = $980/final weight • $980/1204 = $81.40 / cwt or $0.81 per lb • Cost of gain = total cost/ total gain • $350/504 = $69.44/cwt or $0.70 per lb • Assume 3.5 lb per day ADG

  10. Websites • www.agtexas.com • Links • Commodities • Texas livestock options • Chicago Mercantile Exchange Futures • www.cme.com • http://www.lonestarflba.com/

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